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March 25, 2023
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LHV raises £30m in push for UK banking licence

Banking as a service provider LHV UK has raised £30m to fund the creation of a new British bank.

The funds came through an oversubscribed rights issue organised by parent company LHV Group, which is headquartered in Tallinn, Estonia, and is listed on the Nasdaq Baltic.

It is LHV’s latest step towards creating a new bank, with the company submitting its UK banking licence application in February this year.

Attaining a banking licence is a key step for fintech companies that wish to hold customer funds directly.

LHV UK is awaiting regulatory approval from the Prudential Regulatory Authority and Financial Conduct Authority.

LHV UK has established offices in London, Leeds and Tallinn. It provides financial infrastructure for 200 fintech and cryptocurrency companies, including Coinbase, Wise and Trustly.

Its products include account services, payment schemes and APIs.

The company is undergoing a restructuring to separate its retail bank division, LHV Bank, from the fintech-focused LHV UK.

Previously, LHV UK had relied on LHV Bank’s banking licence, operating as a UK branch.

The company said the move will “simplify compliance with regulatory and supervisory requirements”.

LHV said the fundraise attracted capital from both existing and new investors, and was oversubscribed by 1.75 times.

“The funds raised are a key step in the UK banking licence application process,” said Erki Kilu, CEO of LHV UK. “In tandem with this ongoing process, we continue to scale up LHV UK’s operations. We’re currently hiring vigorously for our open positions across London, Leeds and Tallinn and continue to develop new client-facing products.”

The post LHV raises £30m in push for UK banking licence appeared first on UKTN | UK Tech News.

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